In re Estate of Janes

Rodney James's will left much of his $3.5 million estate, including a $2.5 million stock portfolio dominated by Eastman Kodak shares, to trusts benefiting his elderly wife Cynthia Janes (plaintiff) and charitable beneficiaries (plaintiffs); shortly after his 1973 death, the Trustee (defendant) suggested selling some Kodak stock to cover expenses, and Cynthia agreed, but the Trustee continued holding the remaining Kodak shares even as their price fell from about $139 per share to $109 by year's end, and eventually all the way to $47 per share by 1980. The Surrogate's Court found the Trustee's retention and failure to diversify imprudent, ruling the stock should have been sold by August 1973, and calculated damages as the difference between the stock's value at trial and its value if sold and reinvested then; the Appellate Division affirmed the surcharge but recalculated damages using the difference between actual sale value and the value when it should have been sold, and the Trustee appealed, arguing Kodak's "blue chip" status made retention prudent.